So you’re turning 30-years-old and you’re starting to think about financial goals and retirement. A lot of 30-year-olds are currently in a tough spot with their finances since they’ve likely graduated with a hefty amount of student loan debt while entering one of the worst job markets in decades. Hopefully, you’ve been fortunate enough to find a job, begin a career, and begin contributing to your retirement.

What I wanted to discuss was how much you should have saved by now in your 401(k) or IRA by the time you are 30-years-old. The basic rule of thumb is that you should have saved 1x your salary by the time you for 30-years-old. That seems realistic, but still a lofty goal for most individuals approaching their 30’s. Fidelity believes this goal should be reached by the time you’re 35 rather than 30, so if you’re not quite there yet, don’t worry. You have another 5 years to reach that goal.… Read More »

Should I add Apple ($AAPL) to my IRA in 2013? That’s the question that many investors are asking themselves when thinking about their 2013 IRA positioning. On December 31, 2012, I added AAPL to my IRA at $525 after getting a bounce from the $505 area early in the morning. Shares closed the day at $533.

A lot of people are shying away from buying into Apple since the stock pulled back from its high of $705, which it hit in September 2012, down to $500 — a near 30% drop in its share price in the last three months. From the beginning of the year, AAPL is still up 30% YTD, so its still been one the best performing stocks year-to-date among widely-held stocks. I view the Q4 sell off in Apple due to profit taking which accelerated in the last quarter for investors who wanted to lock in gains in 2012 when tax rates were set to rise in 2013.… Read More »

As of December 31, 2012, we received an announcement from President Barack Obama that Congress is close to reaching a deal on the fiscal cliff. Markets have been quite volatile in December awaiting news on whether a deal regarding tax rates and government spending would be reached. The Dow started December around 13,000, rose to 13,300, and fell back to 13,000 based on how the fiscal cliff negotiations were going. The basic framework of the fiscal cliff negotiations is that the top tax rate will rise from 35% to 39.6% for individuals earning $400,000 or families earning $450,000. Taxes on dividends will remain at 15% for those under that threshold but will rise to 20% for those over that threshold.

Now that we have some clarity regarding where taxes on incomes and dividends will be, I’ve been thinking about my IRA positioning for 2013. Should I invest in equities, bonds, gold, REITS, housing stocks, foreign stocks, or technology stocks?… Read More »

So you are looking to purchase your first home, but are concerned that you don’t have enough money saved up to come up with the down payment on your home. Fortunately, you have been diligently making contributions to your individual retirement account (IRA) over the years and have built up substantial savings in your IRA. You’re left wondering if and how you can withdraw money from your IRA to help you come up with the down payment for your first home and do it without incurring any penalties or taxes.

How Much You Can Withdraw From an IRA

Before getting too excited about using the funds in an IRA to use as a down payment on a home, we first have to discuss the limit on how much can be withdrawn. Only a maximum of $10,000 can be withdrawn from an IRA to use as a down payment on the home.… Read More »

The IRS has announced changes affecting 401(k) plans that are set to go into effect January 1, 2013. Among the changes are increases to the contribution limit, as well as mandatory fee disclosure that will be sent quarterly and annually.

2013 401(k) Contribution Limit

Among the changes that are set to go into effect in 2013 is an increase in the contribution limit. Prior to 2013, the contribution limit for a 401(k) was $17,000. The contribution limit will increase to $17,500 in 2013. The contribution limit changes annually and is based on inflation and increased in $500 increments every few years.

2013 401(k) Catch-Up Contribution Limit

The catch-up contribution limit applies to employees who are over the age of 50-years-old. Employees who are over the age of 50 have the ability to make an extra contribution to their 401(k). Unfortunately, the catch-up contribution limit has not increased and will remain the same.… Read More »